Moving forward during a financially difficult time may seem like trying to swim against the current. South Carolina residents may feel as if they are working hard to address their debt problems only to find themselves not making much headway. In such cases, individuals may be interested in Chapter 7 or Chapter 13 bankruptcy in hopes of forgoing further financial damage.
Before filing, individuals will likely want to understand the differences between these two types of personal bankruptcy. With Chapter 7, assets will be liquidated as part of a way to repay creditors. However, it is unlikely that all assets will be liquidated, and the assets that are affected may depend on a multitude of factors. State laws and the individual nature of the case are just two considerations.
If the conditions of a bankruptcy filing allow for the individual to potentially repay their debts, liquidation may not be necessary. With Chapter 13 bankruptcy, a person works with a court-approved repayment plan that allows for the debts to be repaid over the course of three to five years. As with Chapter 7, there are factors that could play a role in how Chapter 13 bankruptcy is carried out.
Of course, an individual's specific financial circumstances will play a role in determining for which type of bankruptcy he or she qualifies. If individuals have a steady income and are able to repay debts overtime, Chapter 13 may be the course followed. In other cases where income may be an issue, liquidation under Chapter 7 may be warranted. In either type of filing, discussing concerns with an experienced South Carolina attorney could prove beneficial.
Source: mysanantonio.com, "Two Types of Bankruptcy", June 15, 2016